Equity Projection Calculator

How to Read the Equity Projection

The chart shows three lines: your home value over time, your loan balance as interest compounds, and the remaining equity (home value minus loan balance). The remaining equity is what you or your estate would receive after repaying the reverse mortgage.

The role of home appreciation

Canadian home values have historically appreciated at 4–6% annually in major urban markets, though this varies significantly by location and market cycle. The projection lets you model conservative (2%), moderate (4%), and optimistic (6%) appreciation scenarios. Even at 2% appreciation, most Canadian homeowners retain significant equity over a 20-year horizon because they only borrow 15–55% of their home value.

Semi-annual compounding

Canadian law requires reverse mortgage interest to compound semi-annually (twice per year) under the federal Interest Act. This is different from mortgages in many other countries that compound monthly or daily. Semi-annual compounding results in a slightly lower effective interest rate than monthly compounding at the same nominal rate.

The no-negative-equity guarantee

All four regulated Canadian reverse mortgage lenders offer a no-negative-equity guarantee. Even in a declining market where the loan balance exceeds your home value, you (or your estate) will never owe more than the home is worth at the time of sale. The lender absorbs any shortfall.

What does this mean for your family?

Concerned about what your heirs will inherit? Our detailed estate impact analysis shows projections for 5, 10, 15, and 20 years. For a family-focused perspective, see how a reverse mortgage affects inheritance. To compare rates that affect how fast the balance grows, review all five Canadian lenders.